Ambiguity in taxing notifications is construed in favour of the dealer, extending set-off to all scrap in the schedule entry.

A taxing notification granting set-off for steel ingots, billets and rerollable scrap referred to in item 2 of the Third Schedule was interpreted to cover all scrap types listed in that item, not only a separately described rerollable scrap category. The court read the language and schedule structure as indicating a broader intended benefit, and held that any ambiguity in an exemption or set-off notification must be resolved in favour of the dealer. The set-off was also treated as applicable only where the goods had suffered tax at an earlier stage, supporting the assessee's entitlement to the reduction.

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Issues: Whether all types of scrap mentioned in item 2 of the Third Schedule to the Andhra Pradesh General Sales Tax Act, 1957 were entitled to the set-off under G.O. Ms. No. 774 Revenue(s) dated 9th July, 1985.

Analysis: The G.O. granted reduction of tax where tax had been levied and collected in respect of steel ingots, billets or rerollable scrap referred to in item 2 of the Third Schedule. Item 2 contained several entries of scrap, but no separate entry described as rerollable scrap. The surrounding language of the G.O. and the structure of the schedule showed that the reference to item 2 was intended to cover the scrap mentioned in that item as a whole. Any ambiguity in the exemption or set-off notification had to be resolved in favour of the dealer. The set-off was also intended to operate only where the item had suffered tax at an earlier stage.

Conclusion: The benefit of G.O. Ms. No. 774 extended to all types of scrap mentioned in item 2 of the Third Schedule, and the assessee was entitled to the set-off.

Ratio Decidendi: Where a taxing notification refers to goods covered by a schedule entry and the language is ambiguous, the ambiguity is construed in favour of the assessee so as to give effect to the broader set-off benefit intended by the notification.

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